Now here's what I've never really understood (housing prices). (Richmond: real estate, apartments)

[Sonorio]

It says in City Data that the median income in Richmond is $38,461, which is about where I might be.

It says that the average residence costs $203,900.

Based on the premise that your digs should cost about twice your yearly income; does this mean that most people in Richmond are homeless?

Or does every home have 2.65 wage-earners?

Apartments don't count. Rent rates are almost equal to mortgage payments, for much less space and constant proximity to smelly, noisy neighbors.

If I want to live in Richmond I guess I have to marry someone who wants to work, and adopt an employable-age adolescent to pitch in too.

They say that men make more than women so I guess I could try to learn how to be gay....

S

[sls76]

The average home price is from 2007 (near the peak). My guess is it would be 10% lower now, but I'm not sure. What I find interesting is that the average home price was around $88k in 2000 (so it more than doubled in 7 years) while median family income wasn't even up 25% over that period. My guess is prices have at least 20% to fall, but who knows. I do think you bring up a great point about affordability.

[BigMike50]

I just bought a house that was appraised at 575,000 for 510,000 and I still feel I paid to much Technically I have no income so 2.5 x 0 = 0

[jhrichmond]

Not sure what you mean about "learning to be gay". That's a pretty ignorant statement. If your income is that little, you will not be able to get a mortgage on a 200,000 home. You have to consider the cost of taxes and insurance in addition to the principal and interest of your mortgage payment. I learned in Real Estate School, years ago, that if you can rent for the same amount as a mortgage, it is wiser to rent. You can also find condo's and townhomes in the area for less than $200K, but then you still have the neighbor problem. You may want to reconsider Richmond, otherwise. The cost of living here is pretty high.

[EricD]

Sonorio, not everyone has a 100% mortgage. Some people own their home, or purchased their home 5+ years ago, before home prices went up. Others do have a dual income. Also, generally the people moving to Richmond are the people who are getting paid more. Not many people move to a new city to take a low-paying job.

Oh, and the thing about averages is that high-priced homes really swing things. If 7 homes sell, and 5 are worth $200k, and two are worth $600k, the 'average home price' is $314k. Even though a lot of homes are sold for under $200k, the really high-priced homes pull the average up.

Unfortunately, for now, you can't afford an average house, while making an average salary, unless you have some money to put down on the place. If you're making about 38.5k, and you have 20% to put down, and no other debt (and you live alone)... I could see you being able to swing a mortgage on a $208k home. ($166.4k mortgage, about $1200 per month or so with taxes and insurance)

But that's a lot of if's.

[Sonorio]

"Not sure what you mean about "learning to be gay". That's a pretty ignorant statement."

Why, exactly?

S

[Yac]

Let's try to stick to the topic, ok ?
Yac.

[Sonorio]

I'm all for that. Although I'm getting environmental data here that will be useful in making my choice of cities to consider.

S

[dqma]

Originally Posted by sls76

The average home price is from 2007 (near the peak). My guess is it would be 10% lower now, but I'm not sure. What I find interesting is that the average home price was around $88k in 2000 (so it more than doubled in 7 years) while median family income wasn't even up 25% over that period. My guess is prices have at least 20% to fall, but who knows. I do think you bring up a great point about affordability.

Don't forget that the unemployment rate increase accelerated in the last few months. It went from 5.6 % in December to 6.9% in January. Although it is still lower than the national average but at this pace it will soon catch up in the new few months.


The recession clearly shows the vulnerable side the Richmond economy is. People used to think that Richmond is recession proof city but actually most of the business here is traditional cyclic industry and so very sensitive to economic downturn. Yes, there are quite a few large companies, but few of them are in high growth area so employment growth is limited. In turn unemployment rate can stay high if a few big ones go under. One reason it’s because unlike bigger cities, there is not much hi-tech industry(like low input high margin software product development) that provides high growth opportunities. Only one university here so it’s hard to recruit local people with high education.

If the cost of living(including housing price) continues to be much higher than similar city like Raleigh, there is not really any advantage for business to operate here in Richmond.

Of course high unemployment drives up foreclosure. Just one foreclosure can negatively affect the housing price in the neighborhood.

SoI believe the housing price will drop further...

[sls76]

Originally Posted by dqma

Don't forget that the unemployment rate increase accelerated in the last few months. It went from 5.6 % in December to 6.9% in January. Although it is still lower than the national average but at this pace it will soon catch up in the new few months.


The recession clearly shows the vulnerable side the Richmond economy is. People used to think that Richmond is recession proof city but actually most of the business here is traditional cyclic industry and so very sensitive to economic downturn. Yes, there are quite a few large companies, but few of them are in high growth area so employment growth is limited. In turn unemployment rate can stay high if a few big ones go under. One reason it’s because unlike bigger cities, there is not much hi-tech industry(like low input high margin software product development) that provides high growth opportunities. Only one university here so it’s hard to recruit local people with high education.

If the cost of living(including housing price) continues to be much higher than similar city like Raleigh, there is not really any advantage for business to operate here in Richmond.

Of course high unemployment drives up foreclosure. Just one foreclosure can negatively affect the housing price in the neighborhood.

SoI believe the housing price will drop further...

It's not that I disagree with your conclusion, but I question some of your assumptions.

1) The unemployment rate you cite is not seasonally adjusted. If you look at the not seasonally adjusted rate for the US for the same period, it increased from 7.1 to 8.5%. In other words, the not seasonally adjusted aspect makes the increase look worse than it is, but the change in Richmond is in line with the national change so there is no evidence that Richmond will catch up with the national average anytime soon.

Va. unemployment jumps to 6.4% in January | Richmond Times-Dispatch (http://www.timesdispatch.com/rtd/business/local/article/B-JOBS14_20090313-210609/231239/ - broken link)
Bureau of Labor Statistics Data


2) The cost of living here is not much higher than Raleigh. I've lived in both and looked at online cost of living calculators. They're pretty comparable.